Indian partnership Act 1932

Definition ( section 4). Partnership is the relation between the persons who have agreed to share The profits of a business Carried on by all or any of them acting for all. Firm the persons who have entered into partnership with one another, are collectively called firm.

Essential elements of partnership

1. 2. 3. 4. 5. 6. Association of 2 or more persons. Agreement. Business. Agreement to share profits. Mutual agency. Competency for becoming partner.

Partnership
1. Not a legal entity. 2. Partners liability unlimited. 3. Cannot transfer his share without the consent of the partners. 4. Death, bankruptcy, lunacy dissolves the partnership 5. Every partner can participate in management.

Company
1. Legal entity. 2.Shareholders liability limited. 3.Shareholder can transfer his share without the consent of other shareholders. 4.Company not dissolved by these. 5. Management by elected persons called Board of Directors.

Test for partnership

There must be an agreement entered in to by 2 or more persons. The agreement must be to share the profits of business. The business must be carried on by all or any of them acting for all. Cox V. Hickman. sharing of profits not conclusive test.

Kinds of partnership

Partnership at will

Particular partnership

Partnership for a fixed period

General partnership

Partnership deed
1.Name of partnership firm. 2. Names of all partners. 3.Nature and place of the business of the firm. 4.Date of commencement of partnership. 5.Duration. 6.Capital contribution of each partner. 7.Profit sharing ratio. 8.Admission and retirement of a partner.

9.Rates of interest on capitals ,drawings & loans. 10.Provisions for settlement of accounts in the case of dissolution of the firm. 11.Provisions for salaries or commissions, payable to the partners if any. 12.Provisions for expulsion of a partner in case of gross breach of duty or fraud.

Kinds of partners
1. Actual or ostensible partner.-active. 2. Sleeping or dormant partner.-contributes
3. 4. 5. 6. 7. 8. 9. 10.

property, no labour. Nominal partner. Sub-partner. Partner in profits only. Partner by holding out. Insolvent partner. Incoming partner. Outgoing partner. Partner by estoppel.

Registration procedure (section 58)

By making an application to the registrar of firms of a locality A statement in the prescribed form Accompanied by prescribed fee, with particulars a)The firm name, b) Place of business of firm, c) Names of any other places where the firm carries on business, d) The date when each partner joined the firm, e) Name in full and permanent addresses of the partners. f) Duration of the firm. Registrar satisfied ,entry in to Register of firms and file the statement. Then the firm is duly registered.

Effect of non-registration (section 69)

1. No suit by a partner against the firm or the partner. 2. No suit by firm against third parties. 3. Neither the unregistered firm nor its partners when sued can claim a set-off. ( if a third party files a suit against an

unregistered firm for the recovery of debt from the firm, the firm cannot say that the money owing by the third party to the firm should be set-off against the claim)